CBZ bemoans growing rental arrears
LISTED financial services group CBZ Holdings has bemoaned growing rental arrears, restrained rental yields and low occupancy levels obtaining in the commercial property sector for weighing down on overall performance of its property investments.
This comes as property firms have reported growth in vacant space and declining margins as tenants are negotiating lower rentals on account of liquidity constraints that have hampered business growth.
Activity remained concentrated around medium and low cost housing development, during the period under review, CBZ chairman Mr Noah Matimba said in the company’s June 30, half year results for 2017.
Out of a net cash outflow of $4,2 million compared to $5,4 million in the first half of 2016, CBZ spent $62 414 on purchase of investment properties in the period under review, down from $1,5 million in the same period prior year.
Proceeds on disposal of property and equipment amounted to $238 395 from $37 050 in the first half of 2016.
The group said it used $2,6 million for the purchase of property and equipment, down from $3,1 million prior year. At the end of the reporting period, CBZ’s land inventory amounted to $62,2 million, up from $60 million.
Property sales plunged significantly to $1,3 million, from $3,3 million in the first half of 2016 while rental income doubled to $1,4 million compared to $678 000 in the previous comparative period.
The group reported a $350 000 loss on sale of investment properties and $900 loss on sale of property and equipment in the period under review.
Mortgage interest fell to $5,5 million down from $7,3 million.
During the period ended 30 June 2017, an amount of US$1 378 348 (June 2016: US$1 015 117) was recognised as rent expense in the statement of profit or loss and other comprehensive income.
The group leases a number of buildings from which its branches operate. The leases typically run for a period of 5 years with an option to renew the lease after the expiry date